COMPETITION WATCH: Railway shipments boom in the second quarter

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Canadian railways reported their strongest quarter for shipments in five years between April and June this year.

Statistics Canada figures just released indicate that in total, rail freight hit 72.8 million metric tonnes during the second quarter, up 10.0% over the first three months of the year, and 12.1% higher than the second quarter of 2003.

Total shipments were the highest since the first quarter of 1999.

Non-intermodal freight, consisting mostly of bulk commodities, accounted for 89% or 65.7 million tonnes, of the total, an 8.4% increase from the first quarter, according to Statistics Canada data. About 791,000 railway cars were required to transport the freight.

Examining the growth at the commodity level, Statistics Canada reveals that six commodities (wheat, potash, other metallic ores and concentrates, coal, other non metallic minerals, and lumber) combined for an overall increase of 5 million tones. The increase in wheat alone was close to 1.4 million tonnes.

This gain was only partly offset by declines in gaseous hydrocarbons, fuel oils and crude petroleum, logs and other wood in the rough, fresh chilled and dried vegetables, and salt. These combined for a total drop of 1 million tonnes.

Loadings of intermodal freight, that is, containers and trailers hauled on flat cars, rose 11.9% to a record high 7.1 million tonnes.

Trailers, however, appear to be on a downward trend compared with containers, Statistics Canada notes.

"Trailers on flat cars accounted for only 5.7% of intermodal traffic in the second quarter of 2004, down from the peak of 7.8% in the first quarter of 2003," according to Statistics Canada’s Daily Bulleting newsletter.

Traffic from the United States was up slightly in the second quarter. Tonnage reached 6.8 million tonnes or 2.0% higher than the first three months of the year.

On a monthly basis, railways handled 24 million tonnes of freight in June, down 1.2% from May. The decrease is consistent with historic declines throughout the summer months.

Non-intermodal freight totalled 21.7 million tones in June, down from 21.9 million tonnes in May. About 277,000 carloads were required to carry the freight. Coal, potash and fertilizers as well as sulphur accounted for most of the decline.

Offsetting the drop were gains in wheat, other non metallic minerals, alumina and iron and steel (primary or semi-finished).

Intermodal loadings, which accounted for 9.6% of total tonnage, fell 2.5% to 2.3 million tonnes in June.
Freight arriving from the United States, either destined for or passing through Canada, fell 6.6% to 2.2 million tonnes.

On a year-to-date basis, the cumulative total for non-intermodal loadings for the first six months of 2004 jumped 11.6% compared with the same period last year. Intermodal loadings increased 4.6%, while traffic received from the United States was up 2.9%.

Economic growth both abroad and in Canada, as well as stronger grain shipments, was behind most of the year-to-date gains. Rail companies say the growth would have been even greater had it not been for slowdowns caused by the high volume of traffic on railways.

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